The development expenditures at the federal level remained the lowest last year among three major Ds (debt servicing, defence and development) as the federal public sector development programme just consumed Rs661.29 billion in the previous financial year.

Public debt servicing consumed nearly 42.36 percent of the total revenues last financial year. Ideally, this ratio should be below 30 percent to allow the government to allocate more resources to social and poverty related matters. The break-up of Rs1.3 trillion shows that the government paid mark-up of Rs1.12 trillion on domestic debt and Rs118.4 billion on foreign debt during the financial year that ended on June 30 2016.

Domestic interest payments constituted around 90 percent of total debt servicing, which is due to increasing volume of domestic debt in overall public debt portfolio.

Meanwhile, the government has estimated to spend Rs 1,360 billion on interest payment in the next financial year, 2016-17, which is to be 37.56 percent of the FBR’s tax revenue target of Rs3, 621 billion. The government will pay mark-up of Rs1.247 trillion on domestic debt and Rs113 billion on foreign debt.

Pakistan’s public debt surged to Rs19, 168 billion by end March 2016, registering an increase of Rs1, 787 billion during first nine months (July-March) of the current fiscal year, 2015-2016. The latest Economic Survey, 2015-2016, reveals that domestic debt increased by Rs1200 billion, which was taken by the government for financing the fiscal deficit. Similarly, the external debt enhanced by Rs588 billion.